CAC is the cost directly related to the acquisition of the next customer (ie the variable costs). This is not the fixed costs of running a company (salary, rent, etc). It includes basically anything you spend before you sign up the customer, like answering emails to prospects, implementing new features, fixing bugs found during trials, writing blog posts, etc. Or for high $$ SaaS companies, advertising, phone calls, meetings, proposals, demos, seminars, writing letters, lunch & learns, etc.

If CAC is zero, you are basically saying customers are finding you and signing up on their own, with zero effort from you. This is possible (ie Twitter), but the LTV (life-time value) for these products is usually very low. Usually, the company is expecting a few dollars per year of revenue from each customer from advertising.

this is an accounting question. Rent is not a marketing expense and neither is health insurance. But salaries are. As is any SaaS you buy, from hootsuite, optimizely, etc. If you're on accrual accounting (and as a startup, why? no reason to do this until you're much farther along) you recognize the expenses in the month you have them, but the revenue is divided by 12. this is the math the post is describing and why SaaS businesses are so hard--early on the metrics look terrible because the revenue is deferred but the expenses are not.